FX168 Financial News Agency (Asia-Pacific) reported that Bitcoin continued to hover near its highest level in more than two months as the Asian trading session commenced on Thursday (October 2). It is currently trading around USD 119,000. A potential U.S. government shutdown may delay the release of key economic reports, creating favorable conditions for positive fiat liquidity flows.
Bitcoin surged to a more-than-two-month high following the U.S. government shutdown, potentially triggering a wave of positive liquidity impact. According to CoinDesk data, Bitcoin rose nearly 4% over the past 24 hours, briefly touching USD 119,455—its first breach of this level since mid-August—and is currently trading at USD 118,806.37.
(Source: coindesk)
Other major tokens such as Ethereum, Ripple, Solana, and Dogecoin have risen between 4% and 7%. The CoinDesk 20 Index climbed 5% to 4,217 points.
This market movement occurred after the U.S. government shutdown on Wednesday due to Congress’s failure to reach a funding agreement amid deep divisions. With no resolution in sight, federal agencies have been instructed to initiate contingency measures, forcing hundreds of thousands of employees to stay home. Market focus has now shifted to the duration of the shutdown, with the next Senate vote scheduled for Wednesday.
The Trump administration warned that if an agreement cannot be reached, massive layoffs could be implemented—a threat that has made traders more cautious and inclined toward risk aversion. For now, the government shutdown appears to have provided a short-term boost to Bitcoin, but its sustainability remains questionable.
The immediate reaction in U.S. stock markets has been limited; however, data from ADP added pressure: it showed a loss of 32,000 private-sector jobs in September, while August figures were revised to reflect a net reduction of 3,000 positions.
Liquidity Expectations and Fed Rate Cuts
The government shutdown may delay the release of the non-farm payroll data originally scheduled for Friday. This could lay the groundwork for “liquidity expansion,” referring to increased money supply within the financial system, often leading to easier financing, lower borrowing costs, and encouraging economic growth and risk appetite in financial markets.
Matt Mena, a crypto research strategist at 21Shares, wrote in an email: “If the ADP data serves as a leading indicator and the Bureau of Labor Statistics (BLS) report is delayed, the Federal Reserve is likely to cut interest rates by another 25 basis points in October while signaling the possibility of a second rate cut in December, along with an early hint at scaling back Quantitative Tightening (QT). This combination should lower real interest rates, weaken the US dollar, and trigger a mild bear steepening of the yield curve in the fourth quarter, while keeping gold resilient. The overall effect would be a positive liquidity shock, which historically supports Bitcoin.”
Wednesday’s ADP private sector employment data painted a weak labor market picture, bolstering the case for continued rate cuts by the Federal Reserve. The Fed just lowered rates by 25 basis points last month and hinted at the possibility of further easing in the coming months.
Mena added that Bitcoin’s rally following the government shutdown could foreshadow an explosive move ahead.
He said: “The signal is clear: Bitcoin is one of the few assets that can benefit when traditional rules falter amid disrupted data releases and heightened macro uncertainty. Investors should closely watch this moment—it may mark the beginning of the next explosive rally in the crypto market.”
Options pricing is cheap.
Greg Magadini, Head of Derivatives at Amberdata, noted that near-term BTC options on the Deribit platform appear inexpensive, offering a way to bet on future significant moves while maintaining a hedge.
Magadini told CoinDesk: “After a prolonged period of ‘volatility drought’ in BTC, the U.S. government shutdown could act as a catalyst for substantial Bitcoin volatility. Coupled with a steep contango in the term structure of implied volatility, this makes options look cheap.”
“Steep contango” refers to an upward-sloping curve in the term structure of implied volatility (IV), where forward volatility is significantly higher than near-term volatility, indicating that the market expects future volatility to be much higher than current levels. This makes near-term options relatively inexpensive, as option prices are closely tied to implied volatility.
Magadini recommended a “long straddle” strategy to prepare for upcoming volatility: simultaneously purchasing call and put options with the same strike price and expiration date. When the asset price rises, the call option profits; when it falls, the put option provides protection. Combined, this means the buyer of the straddle can profit as long as there is significant price movement.
He said: “The US dollar may experience volatility due to the government shutdown and this week’s employment data… These factors will guide the Fed’s decisions. Such catalysts could push BTC higher (as a hedge against the dollar) or drive it lower during a risk-off panic in broader assets.”
Bitcoin Technical Analysis
The price of Bitcoin successfully held above $115,000 and initiated a new upward movement. BTC breached the resistance level at $115,500, triggering this rally. The bulls pushed the price above $117,000 and $118,000, even breaking through $118,800. The price reached a high of $119,453 and is currently consolidating near the 23.6% Fibonacci retracement level of the upward wave from the low of $112,806 to the high of $119,453.
Bitcoin is currently trading above $117,000 and remains above the 100-hour simple moving average. Additionally, a short-term ascending trendline has formed around $117,000 on the BTC/USD hourly chart, providing support.
The immediate resistance level is near $119,000, with the first key resistance at $119,250, followed by $119,500. A close above $119,500 could drive the price higher, testing the resistance at $120,500. If the upward momentum continues, the price may target $122,500, with the next obstacle potentially at $123,000.
If Bitcoin fails to break through the resistance zone at $119,500, a new round of pullback may occur. Immediate support lies near $117,000 and the trendline, with the first major support at $116,150. The next support is in the $115,500 region, and a break below that could lead to further downside toward $114,000. The key support level is at $113,500; once breached, Bitcoin may struggle to recover in the short term.
(Source: tradingview)
In terms of technical indicators, the hourly MACD is accelerating within bullish territory, and the hourly RSI for BTC/USD is above 50.
The major support levels are at $117,000 and $116,150, while the key resistance levels are at $119,500 and $120,500.
